Mix Hollywood Dreams and Sandhill’s Green and you get a lot of would be movie moguls focusing their creative powers on Internet video.

The latest to add to the growing list is Deca, a Santa Monica based studio that’s billing itself as “the best of Hollywood, Madison Avenue and Silicon Valley.”

Deca will start out with $5m in funding from Mayfield Fund, General Catalyst Partners and Atomica Partners, a fund from Joost co founder Niklas Zennstrom. The financing was closed in July using the name Digital Entertainment Corp of America. Deca, being the obvious acronym. CEO and Co-Founder, Michael Wayne was formerly a VP for strategic alliances at Sony Pictures.

Like these competitors, Deca will scout for video talent, and ideas, then develop and distribute them across the web (or mobile platforms) through various portals. It’s a lot like movie or television studios looking for scripts to package into the next blockbuster or prime time hit. It also has some of the same risks, notably finding an audience and standing out from the competition.

It is unclear whether Deca, or even the entire model, can be successful in its present form. The pool of content in Internet video is already deep (though much of it is second rate in quality). The first measurement of success will be audience appeal. They’ve got to build their franchise and generate recurring interest. Vuguru’s done that with its Prom Queen series but other studios, while generating audience haven’t found the same kind of traction, yet. And none have risen to the level of viral video’s breakout hit, Lonely Girl 15.

The second measure of an IV Studio’s success is revenue. They need to find a way to make money. Internet video advertising, while promising, is still a fledgling industry with much unproven and undecided. Even with production costs low, it may not be possible in the present market for display advertising revenue to recoup costs. A successful model may require a focus on product placements, or other creative forms of ad revenue. How Deca plans to balance this is unclear.

In an interview published yesterday, Wayne was quick to point out that Deca doesn’t view itself as a production company. He instead compared the project to the early movie studios saying, “long before there was venture capital, the Hollywood studio model was venture capital for entertainment.” Deca, in his point of view, is a continuation of that theme. They’re seeking to find and fund entertainment content.

Semantic arguments of how you define Deca notwithstanding, the measurements of success for a production company or investment vehicle are still the same: they’ve both got to generate return on investment.

In many way’s IV Studios are throwing things at a wall to see what sticks. Deca’s the latest to wind up and make a pitch.